Key figure in Seattle schools scandal pleads not guilty

LEVI PULKKINE, Seattle Post-Intelligencer

By LEVI PULKKINEN, SEATTLEPI.COM STAFF

Updated 11:16 am, Thursday, December 15, 2011

Former Seattle Public Schools employee Silas Potter is arraigned on Thursday, December 15, 2011 at the King County Courthouse in Seattle. Potter is accused of taking hundreds of thousands of dollars from the school system.

Photo: JOSHUA TRUJILLO

Former Seattle Public Schools employee Silas Potter is arraigned on...

Former Seattle Public Schools employee Silas Potter is arraigned on Thursday, December 15, 2011 at the King County Courthouse in Seattle. Potter is accused of taking hundreds of thousands of dollars from the school system.

Photo: JOSHUA TRUJILLO

Former Seattle Public Schools employee Silas Potter is arraigned on...

Former Seattle Public Schools employee Silas Potter is arraigned on Thursday, December 15, 2011 at the King County Courthouse in front of Judge Theresa Doyle. Potter is accused of taking hundreds of thousands of dollars from the school system.

Photo: JOSHUA TRUJILLO

Former Seattle Public Schools employee Silas Potter is arraigned on...

The former Seattle Public Schools employee at the center of a criminal investigation into a contracting scandal has pleaded not guilty to felony theft charges filed against him.

Arrested Nov. 9 in Florida, Silas Potter, Jr. appeared in King County Superior Court Thursday morning to face felony theft charges against him in the wake of a contracting scandal that cost the district superintendant her job.

Potter, who ran a $1.8 million contractor-outreach program for the district, has been accused of embezzling hundreds of thousands of dollars from the program. While the ensuing scandal cost Superintendent Maria Goodloe-Johnson and the district's chief financial officer their jobs, only Potter and two alleged accomplices have been criminally charged.

An arrest warrant was issued for Potter in early November when he failed to show up for his first court appearance. He was arrested the following day in Tampa, Fla., and is jailed on $100,000. His codefendants -- David A. Johnson, 48, and Lorrie Kay Sorensen, 45 -- previously pleaded not guilty to felony theft charges and are currently free.

Eight months after a damning report by the state Auditor's Office, King County prosecutors charged the trio with stealing $250,000 from the Seattle schools program meant to encourage small firms to bid on district projects. Multiple counts of felony theft were filed against Potter, Sorensen and Johnson, who purported to run a Tacoma nonprofit agency.

State auditors examining the small-business development program found that $1.5 million in expenditures were questionable and that $280,000 was paid for work that wasn't done or didn't benefit Seattle Public Schools.

First hired by the district as a mover, Potter was promoted in 2005 to run the regional small-business development program. With little oversight, he administered payments for business classes and workshops meant to help small and minority-owned businesses better compete for school district construction contracts.

A Seattle police investigation uncovered that Potter and Johnson arranged to create fake invoices from Grace of Mercy – Johnson's nonprofit – for classes that were never taught, according to charging documents.

Potter allegedly admitted that he approved the invoices and received cash from Johnson. A personal budget on his computer showed an entry for a $2,500 monthly allocation, according to a police report.

Police discovered Johnson and Sorensen had created a second fraudulent business, Emerald City Cleaning.

Johnson allegedly told police it was a "front for getting easy money from the school district." The cleaning company was set up to receive payments that were ostensibly for janitorial services after classes. The district was billed $83,000 over two months, according to a police report.

Potter reported to Fred Stephens, the district's former facilities director, who was faulted in an internal investigation for lax oversight and not informing the School Board about early allegations of fraud in the program. Stephens resigned from the district before the scandal broke to work as deputy assistant secretary for administration at the U.S. Department of Commerce.

Stephens was instrumental in promoting Potter to run the program. Announcing the charges on Oct. 25, through, King County Prosecutor Dan Satterberg said none of Potter's supervisors was complicit in the thefts.

"There is no evidence that Stephens knew of Potter's thefts or that he profited from them himself," Satterberg said. "This is a case about an abuse of trust – the district's trust in Silas Potter was misplaced and abused."

Prosecutors reviewed thousands of documents, including bank records and audit reports. They also interviewed several contractors, all but two of whom were willing to speak with investigators.

Those contractors – Tony Orange, former director of the Central Area Motivation Program, and Leon Rowland, who heads Banner Cross, a mentoring organization – would not speak to prosecutors without a promise of immunity, Satterberg said. The investigation remains open into their dealings with Potter.

Orange was contracted to bring former students into the district's apprentice program and billed the district $161,000. Rowland was paid $78,000 for instructional services and "development," including lesson preparation, team meetings and communications assistance.

If convicted, Potter and Johnson face a sentencing range of 33 to 43 months in prison. Sorensen could face six to 12 months in jail. Only Potter has been jailed in the case.